VENTURES AFRICA – After a long wait, the U.S. Congress on Thursday renewed the Third Country Fabric Provision of the African Growth And Opportunity Act (AGOA),which has contributed to the growth of the African clothing industry.
The African Growth and Opportunity Act grants selected sub-Saharan African countries 100 percent import duty waiver on exported goods to the United States while the reauthorized provision exempts import duties on clothing exported from most AGOA countries to the United States.
The trade provision which was to expire on September 30, has opened the U.S. market to inexpensive apparel makers in Africa, creating hundreds of thousands of jobs, increasing foreign exchange, facilitating an emerging middle class, reducing poverty and lessening dependency on foreign aid.
The trade pact also benefits the credit-crunch-affected American market, connecting it to a cost effective alternative market.
Commenting on the provision, American senator and ranking member of the Senate Foreign Relations Subcommittee on African Affairs, Johnny Isakson, said: “I commend my colleagues in the Senate for passing this important piece of legislation, which will greatly benefit our economy and support American industry.”
Unfortunately, the long delay in renewing the Third Country Fabric Provision, which has been blamed on partisan politics, has negatively impacted the volume of orders for the African made apparels. Since retailers in the U.S place their orders months in advance, uncertainty of the renewal of the provision stopped the African favoured purchase decision of some of these retailers.
According to the U.S. department of commerce, African textile exports dropped by 27 percent last year.
AGOA has 40 beneficiaries with Nigeria, Angola, South Africa, Gabon, Lesotho, Madagascar and Kenya being the most significant exporters. The law was passed in 2000 and is to be repassed every five years while the clothing provision is to be repassed every three years.